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For a relatively large music collection, I would recommend the smallest size (30 GB) of the ipod (vs. the ipod nano or shuffle).
If you are a student (and even if you're not, but want to say you are), go to the apple website, click on education, select the state of your school, and then select your school. The educational discount isn't outstanding, but it does help.
In terms of traveling with the ipod, you have two options. The first is getting a cassette adaptor that plugs into the headphone jack of your ipod. I had one of these for about 2 years before it finally broke, and never had any complaints. The sound quality wasn't fantastic (and you have to be in a car with a tape deck) but it worked. The other option is something called the itrip (which has been discussed previously on GC). One problem with the itrip is that it can take some fidleing to get it working (a pain if you're in a city where you don't know the radio stations) and has been known to be very frustrating in places with lots of radio stations (especially big cities).
For an in home set up, the ipod will work with any speakers. They can either be purchased at the apple store, or any electronic store (best buy, fry's electronics, etc.).
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